---
title: "Practical Tips for Distribution: Criteria for Evaluating Success or Failure"
description: "This article discusses the importance of initial distribution in regional market success and outlines eight common signs of distribution failure, such as using consignment, insufficient coverage, excessive promotional intensity, and lack of follow-up actions. It also presents six ideal outcomes of successful distribution, including completing distribution in the off-season, achieving high cash-on-delivery rates, and ensuring rapid sell-through."
author: "朱志明"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-10-09"
language: "en"
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# Practical Tips for Distribution: Criteria for Evaluating Success or Failure

> This article discusses the importance of initial distribution in regional market success and outlines eight common signs of distribution failure, such as using consignment, insufficient coverage, excessive promotional intensity, and lack of follow-up actions. It also presents six ideal outcomes of successful distribution, including completing distribution in the off-season, achieving high cash-on-delivery rates, and ensuring rapid sell-through.

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During the introduction of a product into a regional market, the effectiveness of the initial distribution and whether it meets expected goals are often among the most critical factors determining the product's success or failure in that market. Therefore, how to complete distribution most efficiently? What are the techniques and key points of distribution? These are topics we need to study seriously, and we must educate distribution planners and execution teams more broadly to achieve effective and beneficial results. Nothing can be accomplished without norms or standards. Today, this article will first share with you the criteria for evaluating the success or failure of distribution.

**I. Eight Manifestations of Distribution Failure:**

**1. Lowering the bar, consignment leads to sluggish sales, and the product quietly dies.**
During the initial distribution of a new product, because retail points are uncertain about future sales, fear inventory buildup, and worry about tying up capital, they lack the desire to stock up. This makes distribution extremely difficult. Many sales personnel, to meet company targets for the number of distribution customers, or with the aim of distributing quickly and achieving volume soon, or for other reasons, often directly agree to or tacitly accept consignment as a method to reduce difficulty, increase distribution rate, and shorten distribution time.

However, for the retail point, consigned products carry no risk; if they sell, they earn a little, and if not, they return them. So, unless consumers specifically ask for the consigned product, it's better to sell more of their own stocked items, as this recovers their capital faster. Therefore, consigned products, without active consumer demand, often face a dead end at the retail point. And when we discover that the product is completely stagnant at the terminal, taking remedial measures later—possibly a month later—will be too late.

Moreover, when we attempt remedial distribution, we find that converting consignment to regular dealership becomes exponentially more difficult. Hence, in the first round of distribution, we should insist on cash-on-delivery and not waver easily.

**2. Insufficient coverage, market sales stagnate.**
Total sales in a regional market are accumulated from all individual retail points. When distribution breadth is insufficient, the cumulative sales from individual points are undoubtedly minimal. Additionally, with insufficient breadth, the product's influence across the market is lacking, consumer visibility is low, and thus the pull effect on retail points is limited.

Of course, we are not saying that during distribution, we should not select or classify terminals. When necessary, an early strategy of targeting core stores to achieve sell-through and then gradually expanding is acceptable. The key is to have clear and accurate execution goals and evaluation criteria for different distribution phases.

**3. Excessive initial distribution intensity affects repeat orders.**
How do terminal retail points view promotions? All businesspeople are profit-driven; for them, a reduction in profit is unacceptable. So, when later profits are lower than earlier ones, it becomes hard to accept.

We know that a product's price space is limited, so the space for promotional expenses and profit is also limited. When doing initial distribution, to speed up and reduce difficulty, we often use heavy promotions. This intensity, if not careful, can consume a large portion of the expense ratio, even using up all promotional resources and leading to losses.

We can imagine that such investment cannot be sustained because the company needs to profit and cannot continuously reduce profit margins; the company needs to operate and cannot excessively cut office expenses; employees need to live and won't accept salary reductions. So, even if promotional expenses are insufficient, it's hard to increase them. Will retail points lower their demands for promotional intensity? If we meet retail point demands, what about channel promotions? Consumer promotions? Other ground promotion expenses? If we can't meet retail point demands, will they stock up?

Therefore, we must control the intensity of initial distribution within a reasonable range. We cannot pursue speed and lower difficulty at the expense of excessive intensity, which in the long run will affect overall channel, terminal, and consumer promotions. In the short term, it will affect repeat orders from retail points.

**4. No follow-up actions, affecting sell-through, turning into a half-cooked meal.**
We know a 50-square-meter convenience store carries over a thousand product varieties; a small restaurant has at least 5–10 types of alcoholic beverages. Does getting into a retail point mean consumers will easily see it? How can consumers buy a product they don't understand? We can't have human promotions at every point; many points, especially small grocery stores and restaurants, rely on owners, clerks, and waitstaff to recommend to consumers. How do we motivate them? After sell-through begins, we can't have enough manpower for direct delivery; how do we get second-tier distributors to help? These require planned, purposeful, and continuous actions.

Otherwise, after distribution ends, with no push methods or pull measures, the sales network cannot be quickly built. How can sell-through happen? How can volume increase? If the product doesn't move, it becomes stuck in the market—a half-cooked meal.

**5. Wrong timing for market entry.**
All products have peak and off seasons based on seasonal changes. Consumers' purchasing power and demand curves for certain goods also change with customs, holidays, seasons, income, etc. Therefore, for any product, the distribution period, market maintenance period, sell-through period, and volume growth period have relatively fixed timeframes within a year (special cases exist but are not the norm).

Typically, baijiu (white liquor) focuses on market infrastructure from July to August, and terminal promotions and continuous sell-through from September to October. If delayed, it can directly affect that year's sales. Because by around October, consumers have already formed certain perceptions about that year's baijiu consumption (what to drink is basically decided), and the year's market protagonist is confirmed. Companies not prepared by then won't have good sales performance that year.

When entering the market, we must also consider consumers' recognition and acceptance of the new product, their consumption concepts and habits, and whether their purchasing power is sufficient.

**6. Heavy above-the-line promotion but weak ground support, causing counterproductive effects.**
Currently, new products enter the market mainly through above-the-line promotion to create pull, while ground support relies on distribution, sales network building, and promotions to create push, forming a combination of push and pull for sell-through. In many cases, ground push can generate some sell-through because the product is displayed at terminals, has a smooth supply chain through the sales network, and has targeted promotions for consumers and channels.

However, if there is only above-the-line pull and ground support lags, it results in the awkward situation of “shouting loudly but having no rope to pull.” Ground push must rely on alignment of organization and sales plans, resources, manpower, and channels. When these ground configurations don't match market needs, the product cannot be quickly expanded on the ground, and thus cannot echo the above-the-line promotion.

Even if distribution is completed, the mismatch between organization, resources, channels, and market demand will make it difficult to establish the entire distribution and promotion system, ultimately failing to achieve sell-through. Channel customers will also form negative views, trust will decline, and eventually the product may fail to move or increase volume, even “dying” in the market.

**7. Distribution to a large number of ineffective outlets.**
After distribution, all products rely on sell-through at retail points to develop and survive. However, many terminal points produce different sales results due to location, customer income levels, main products in the store, sales format (retail, wholesale), and the owner's social connections. Some stores may not be suitable as primary targets during the market entry phase. Therefore, after distribution, the product won't sell, and a large number of non-moving points will cause inventory buildup and declining channel confidence. These low-activity customers or second-tier distributors might be the main customers for the next step, and with the drive of core stores, they could generate some sales, but the earlier poor results will clearly hinder future work. During the market entry distribution phase, such points are ineffective for us and should not be entered yet.

**8. Overextended battle lines, low team morale, and loss of rhythm control.**
Any company's financial, material, and human resources are limited, and the depth and breadth of management and monitoring have limits. Therefore, market expansion must rely on the company's actual situation and the limits of current adjustments. If the battle line is stretched too long, it will inevitably generate large expenses for personnel, travel, market, storage, and management, causing financial strain and increased management difficulty. Insufficient management capability creates loopholes that can be exploited; financial strain leads to delayed expense reimbursements, adversely affecting the entire sales team and distributor system, lowering morale. Low morale causes inventory buildup, worsening the situation.

Over-spreading on the surface also makes it impossible to maintain high efficiency and consistency due to insufficient management and monitoring. Control over market operation rhythm is lost, eventually leading to a mess. Finally, we are forced to downsize and shrink the battlefield.

**II. Ideal Distribution Outcomes:**

**1. Complete distribution in the off-season.**
Only by completing distribution in the off-season is there time during the transition to the peak season for above-the-line promotion, terminal promotions, personnel interception, and consumer pull promotions, ultimately achieving volume in the peak season. If delayed too much, when terminals are filled with various products, distribution becomes harder, and the product may be “ignored” due to competitors' heavy promotions. Also, the cultivation period for channels, terminals, and consumers may be too short to do thoroughly, affecting peak-season volume.

Especially for alcoholic beverages, consumers easily form taste habits; once accustomed to a certain alcohol content or aroma, it's hard to change. Typically, by around October, consumers form a psychological hint of “what to drink this year.” If consumer cultivation hasn't been established by then, this year's sales are already “lost.” So, the off-season is the best time for distribution and terminal sell-through work.

**2. Fast, concentrated, and grand; distribution itself is a form of publicity.**
Rapid distribution actions leave an impression of excellent product quality, favorable policies, and strong manufacturer strength, boosting customer and channel confidence. Dragging distribution is seen by channels and customers as obvious “symptoms” of poor product and weak manufacturer, causing them to lose interest and resulting in reluctance to sell.

Concentrated distribution actions allow limited funds, manpower, and materials to be used most fully, improving efficiency and effectiveness. Ample support and logistics ensure the entire action is grand. A motivated distribution team, active and efficient work, sufficient resources, and high momentum also reflect the company's professionalism and positive corporate image, making it easier for channels and customers to identify with. So we say distribution itself is a form of publicity.

**3. High cash-on-delivery rate.**
First, only with cash-on-delivery do terminal points bear the risk of “self-responsibility for profits and losses.” Under such pressure, store owners will proactively recommend to consumers, and owner recommendations are trusted by consumers, thus generating sell-through.

Second, only with cash-on-delivery can the company or distributor recover funds promptly, avoiding the risk of unpaid accounts, effectively increasing capital turnover frequency and bringing more returns. It also boosts the distributor's sales enthusiasm, improves cooperation, and makes various tasks easier.

**4. Combination of points and surface: broad enough surface, good enough points.**
As mentioned, total sales in a regional market are composed of sales from individual points. Only when there are enough individual points with good sell-through will influence be formed on the surface. Only with influence and sell-through on the surface can the product survive and volume increase naturally.

Otherwise, if there are only a few moving stores but a broad surface, product will accumulate in most points; if the surface is narrow, even with good single-point sell-through, it won't form influence in the overall market, ultimately failing to increase volume.

**5. Tight follow-up actions to achieve rapid sell-through.**
After distribution, if subsequent terminal or consumer promotions are not timely, sell-through at points cannot be pushed, and the product gradually turns from new to stagnant.

After distribution, if the sales network is not built timely according to actual needs, terminals will quickly become quiet without supply. Timely follow-up in publicity also has a “strike while the iron is hot” effect.

Therefore, only when distribution is completed or basically completed, and follow-up promotions, publicity, and infrastructure actions are timely, can good and sustained sell-through be achieved. Moreover, at this time, the publicity influence of distribution is still active, the product is fresh, and the enthusiasm of points and channels is high, making rapid sell-through easier.

**6. A shot of adrenaline for the team.**
Efficient distribution depends on “people.” A proactive and active distribution team will undoubtedly bring hope and the best results. However, distribution work is full of boredom and pressure; heavy workloads, terminal skepticism, and setbacks can have a significant negative impact on the team. Therefore, there should be positive incentive measures for the distribution team to improve their mental state and work enthusiasm.

We believe that for frontline employees, the primary need in daily life is material satisfaction. So we advocate an incentive method “dominated by material incentives, supplemented by spiritual incentives” to act as a “shot of adrenaline.”

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